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Federal Court Rejects Summary Judgment for ERISA Interference and ADA Associational Claims

Under the Americans with Disabilities Act (the “ADA”), it is generally unlawful to discriminate against an employee because of his association with a person who has a disability that is covered under the ADA. Under the Employee Retirement Income Security Act (“ERISA”), it is unlawful to discriminate or discharge an ERISA plan participant for the purpose of interfering with the attainment of any right to which he may become entitled under the plan. In this case, the daughter of the employer’s top salesperson incurred over $800,000 in medical claims under the employer’s group health plan for her chronic condition. The employer’s insurer gave notice to the employer that, as a result of her claims, it would increase premiums substantially. Shortly thereafter, the employer’s Chief Financial Officer, who is the officer that reviewed the employer’s medical expenses, decided to terminate the salesperson even though the salesperson’s direct supervisor thought his termination… Continue Reading

New Information Required on 2015 Premium Filings with PBGC

PBGC has requested the Office of Management and Budget (“OMB”) to approve the collection of new information in connection with premium filings. PBGC is revising the 2015 filing procedures and instructions to require after-the-fact reporting of certain risk transfers through lump sum windows and annuity purchases. PBGC is also changing certain premium declaration certification procedures, offering the option for a plan to provide a telephone number specifically for inclusion in PBGC’s Search Plan List on PBGC’s website, updating premium rates, and making conforming, clarifying, and editorial changes. Comments to the OMB must be submitted by February 11, 2015. PBGC’s notice can be found here.

United Kingdom Share Plan Registration Deadline This Year

Pursuant to changes in United Kingdom (“UK”) tax legislation, companies that sponsor or maintain any share-based incentive plans or schemes (tax-advantaged or non-tax-advantaged plans) in which UK employees participate must be registered and self-certified online with the UK tax authorities (HM Revenue & Customs). The registration deadline for all new and existing share plans is July 6, 2015. Failure to meet the deadline may result in losing tax advantages and/or incurring penalties. With respect to non-UK companies, any plans under which stock options, stock appreciation rights, restricted stock, restricted stock units, or other equity awards are granted to UK employees should be registered.

Automatic Approval of Funding Method Change for Takeover Plans

Generally, a change in the funding method for a single-employer defined benefit plan subject to minimum funding standards must be approved by the Treasury Department. An IRS announcement grants automatic approval for a change in funding method that results from a change in the enrolled actuary and actuarial business organization if the new enrolled actuary uses different valuation software or otherwise applies the funding method in a different manner than the prior enrolled actuary, and among other things, the funding target, target normal cost, and actuarial value of plan assets are within five percent of such values using the prior funding method. IRS Announcement 2015-3 is available here.

IRS Issues Revised Procedures for Determination Letter Requests

The IRS recently issued Revenue Procedure 2015-6 (the “Rev. Proc.”), which describes the IRS’s revised procedures for requesting determination letters on the qualified status of retirement plans, including 401(k) plans, profit sharing plans, and defined benefit pension plans (“DL Request”). Changes to the DL Request procedures include new IRS procedures for addressing procedurally or technically deficient DL Requests, new documentation to be included with a DL Request, clarified requirements for DL Requests involving merged plans, and a change in the address to which DL Requests should be submitted. The Rev. Proc. is effective as of February 1, 2015 and supersedes the IRS’s prior DL Request procedures in Revenue Procedure 2014-6. Revenue Procedure 2015-6 is available here.

Proposed Rules Would Include Wraparound Coverage in Definition of Excepted Benefits

The U.S. Departments of Labor, Health and Human Services, and the Treasury have issued proposed rules that would amend the definition of excepted benefits to include certain limited wraparound coverage. The proposed rules would allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to employees who are purchasing individual health insurance in the private market, including through the Health Insurance Marketplace. The rules propose two pilot programs for wraparound coverage. One pilot program would allow wraparound coverage only for Multi-State Plans in the Health Insurance Marketplace. The other pilot program would allow wraparound coverage for those part-time workers who could otherwise qualify for a flexible spending arrangement and purchase individual health insurance in the private market. The proposed rules should assist certain employees who otherwise may not have access to generous employer-based benefits. The proposed rules are available here.

HHS, DOL, and Treasury Issue Proposed Regulations Regarding Summaries of Benefits and Coverage

Under the Affordable Care Act, plans must provide a “Summary of Benefits and Coverage” (“SBC”) under certain situations.  The U.S. Departments of Health and Human Services, Labor, and the Treasury issued joint proposed regulations that clarify when and how the SBC must be provided and address the content of the SBC.  They also issued a proposed revised SBC template and proposed revised uniform glossary to be effective for plan years beginning on or after September 1, 2015. The proposed regulations are available here. The revised template is available here.

Big Changes to Underfunded Multiemployer Plans Coming in 2015

The Multiemployer Pension Reform Act of 2014 (the “Act”) was signed into law mid-December. The Act’s changes include permitting certain multiemployer plans to suspend benefits for participants, including participants already receiving benefits; doubling the amount of PBGC premiums; addressing contribution schedules once collective bargaining agreements expire; and increasing PBGC’s ability to partition plans and facilitate plan mergers. Generally, the Act’s provisions are effective for plan years beginning on or after January 1, 2015. The Consolidated and Further Continuing Appropriations Act, 2015, which contains the Act, can be found here.

IRS Issues 2015 Employer Guidance on Fringe Benefits

The IRS issued a new Publication 15-B, Employer’s Tax Guide to Fringe Benefits for employers to use in 2015. A copy of the publication can be found here.

Guidelines Regarding Determination Letter Requests by Pension Equity Plans

The IRS issued guidelines for determination letter applications for pension equity plans. A pension equity plan (“PEP”) is a type of hybrid pension plan under which the benefit is expressed as a lump-sum amount rather than as an annuity payable at normal retirement age. The “PEP Determinations Worksheet” and “Explanation of PEP Plan Issues,” which are for use by IRS employees in processing determination letter requests, explain issues unique to PEPs that affect plan documents. An IRS Field Directive to IRS employees contains a number of sample provisions that would satisfy the requirement for the plan document to include language that ensures a participant’s accrued benefit will not be reduced on account of any increase in age or service. Links to all three documents can be found on the updated IRS webpage.

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